J.B.---
They are between a 10-15% discount. It will be close to a million sharres. However, as the stock price continues to rise, the less shares will be converted. Let me explain to you what happened. The are convertable debintures which means essentially it is a note that can be converted to stock. When the contract was signed the company did not expect the price of the shares to fall so much, so they only registered with the SEC about 1,950,000 shares. This would have been plenty if the stock price was 4 dollars. If it was $4 only 1.2 million would have been converted. However, the price sank to a low of 1.25 in December and alot of requests for conversion were resieved by the company. As the letter stated, they only had about 100,000 shares left. If an investor came out and said he wanted to convert more than that, CMTR would be in trouble. The contract they had with investors calls for a substantial penalty if this were to be the case. So, to avoid this penalty the SEC granted them the right to issue more shares. Remember, it is only 5 million worth of debintures. This new info does not change that. If CMTR did not do this then they could lose alot of their cash reserves. Money we will need for the HIV test product launch once it is approved. (This is the way I understand it all)
As Always,
Art
Looks like we have good price support above $2. Hopefully it will stick for a couple days and we will know for sure. It looks like $2.50 will be the breakaway point. |
